Changing Lives, One Loan at a Time

, , Leave a comment lets us ‘microinvest’ in a better future for hardworking people around the world


What do you give someone who has everything? That was the question my daughters posed to me one fall, eight years ago. They were struggling to choose a Christmas present for me. I didn’t literally have everything, but I could not think of any material thing I needed or wanted.

For the previous three years, I had lived an unusually minimalist (for me) lifestyle in graduate student housing on the York University campus. Immersed in environmental studies, I learned a lot about: wealth and poverty; excessive consumerism and living on the margins; the North/South divide; the role of the International Monetary Fund and the World Bank, and their impact on the economies of developing countries through the failure of several decades of structural adjustment programs they imposed on those countries.  

When I returned to Winnipeg, I realized how much “stuff” my husband Robin and I had accumulated over more than forty years of marriage and raising three daughters. I compared my minimalist lifestyle in Toronto to what I had become accustomed to at home and pledged (mostly out of a sense of “guilt of the affluent”) not to be a hyperconsumer and only to buy what I needed rather than what I thought I wanted. Hence my answer to my daughters that the gift of their presence at Christmas lunch was all I needed – to which they responded that they do that anyway.   

Just before Christmas, my second daughter, Sunita, called to tell me they had decided on a gift they thought I would be quite happy with, given my vow of austerity. I was intrigued, mostly because she sounded so pleased with herself.

When Christmas day arrived, I opened my stocking to find a card inside. Inside was a gift card marked “Kiva” in the amount of $125 from my three daughters and my younger sister, Sophia. I had no idea what Kiva was; but there was a website, and the girls said I should check it out after Christmas.

The next day, I visited where I learned Kiva is a San Francisco-based, nonprofit crowdfunding organization, established in 2005. Uniquely, Kiva allows ordinary people anywhere – people like me with my Kiva gift card – to provide “microloans” to individuals and groups of borrowers, mostly in developing countries.

Often, borrowers like the ones served by Kiva have no collateral, so they cannot secure loans through normal banking channels. While I was doing graduate studies at York University, I learned about Muhammad Yunus, a Bangladeshi economist who founded the Grameen Bank to provide microloans to poor people, with no collateral. This was contrary to the big bank mentality that to get a loan, you must have some collateral to secure the loan in case of default. For his contribution to economic justice, Yunis was awarded the Nobel Peace Prize in 2006.

I know from my dad’s firsthand experience what it feels like to go to a bank for a loan, only to be denied for lack of collateral. When I was a teenager, he went to the bank for a loan to purchase a truck, but he did not have enough collateral. He ended up borrowing the money from a private individual who charged him 24 percent interest, when banks were charging 5–10 percent. The man came to our home exactly on the day payment was due and told my dad he only needed to pay the interest if money was tight. My dad hastened to repay the loan in a very short time. It was a less than subtle form of loan-sharking, barely legitimized because it was provided by a respected member of the community.

I read about Kiva and its impact on communities, mostly in developing countries. The general concept of a crowdfunding loan (different from simple crowdfunding to raise money for a specific cause, with no need to repay) is that a group of lenders pool their money to offer loans to borrowers who agree to repay the loan within a specified period. With Kiva, each contribution to that pooled loan can be as little as $25, and once repaid, there are three options: 1) relend to another borrower; 2) donate some of the money to Kiva for operational expenses (Kiva solicits these optional donations whenever you make a loan); or 3) withdraw the funds.

While Kiva loans are not interest-free, most Kiva borrowers would not qualify for a loan from a regular bank. Instead, they apply for small loans from Kiva’s local field partners, who themselves must meet Kiva’s criteria. These field partners typically are nonprofit organizations, working with local, underserved communities in poverty mitigation. They do the hard work of screening borrowers, submitting the loan requests to Kiva and managing the repayments. Kiva’s role is that of a broker, working with the field partners to connect borrowers and lenders.

That January, after reading the short bios of some of the many borrowers on, I made my first loan of $50 to a woman in the Philippines named Esther. Fifty years old and married with three school-aged children, Esther operated a boarding house for residents of her community and was seeking the loan to expand the business. I didn’t have any criteria in mind when I picked Esther. Her story sounded good – she was successfully operating a business, had borrowed and repaid a previous loan from the field partner on time, and she looked to be hardworking.

That March, I added another $75 of my own money to bring the lending total to $200. I was a novice at crowdfunding loans back then, but in the eight years since, I have become more focused about considering such things as loan repayment period, loan size, gender of the borrower, sector (e.g., agriculture, retail) and in some cases, the countries where borrowers live.

To date, I have made 167 loans to people in 27 countries for a total of $4,400. That’s the same $200 I started with, repaid over and over throughout the years. Along the way, I’ve made small donations to Kiva and I have lost some through currency fluctuations. But, overall, and astonishingly, the default rate for my loans has been just 0.73 percent. Although the average default rate is more like 1.5 percent, it’s still impressive, given that borrowers typically have no collateral to fall back on.

The role of field partners cannot be understated, as they play a vital role in the provision of microfinance. To qualify for Kiva, every field partner must provide key information about their organization, including the positive social impact of their services on the communities they serve. They must also consent to a site visit, enabling a Kiva representative to meet with management and borrowers. (Kiva itself is funded entirely by donations.)

Microfinance in remote developing communities is a costly social enterprise. To stay afloat – and to expand availability to more borrowers – Kiva’s field partners usually charge substantial interest rates. For example, the interest on some of my current loans ranges from 21 percent per year to as high as 37 percent.

Would-be Kiva lenders may object to borrowers having to pay any interest at all, but the alternative to covering the high cost per borrower of microfinance is to be unable to provide any loans at all. Among the expenses faced by microfinance institutions are travel to remote communities to check in with borrowers; providing training, health services and workshops on financial literacy to borrowers; and coping with the hyperinflation that plagues many developing countries, driving up expenses from one month to the next.  

When my father paid a high interest rate for his loan, it was purely to make a profit for his lender. The high rates paid by Kiva borrowers enable microfinance institutions to keep investing in disadvantaged communities, bringing more and more hardworking people out of poverty.

Several years ago, I happened to go to Cusco, Peru near where two of my borrowers live. I saw many small farms in the surrounding area where I imagined they made their living. Many of these are subsistence farms, run mostly by Indigenous people, who grow enough to provide for their families with a small surplus which they sell at local markets. I had seen this on a teaching assignment to Chile several years before where I visited some small, remote farms.   

Everyone has his or her own reason for helping. In addition to Kiva, I lend directly to an extraordinary man I met in Tanzania, as I wrote about last summer in “Scaling Mt. Karma.” Over the last few years, I have told many friends about Kiva, and thirteen have become lenders themselves. Whenever a friend makes a first loan and indicates that I referred them, Kiva lends me $25 to make another loan myself. Once repaid, the money goes back to Kiva, but I get the pleasure of selecting the borrower.

Kiva’s motto is simple: Make a loan, change a life. Whatever your reason for helping, just do it. And if you’re looking for a near perfect gift this holiday season, think Kiva.  


ss1Sandra Sukhan is a teacher-educator whose academic background and personal interests are in social justice, post-colonial studies and access to education. 

Winnipeg writer Sandra Sukhan was born and raised in Guyana. She recently published a cookbook of some of her favourite recipes, including traditional Guyanese food. To order a copy of Comfort Food From Sandra’s Kitchen: Guyanese and Other Favourites, contact her at or 204-488-2628.



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